Quick answer: Shipping from Canada to the UK, you generally pay UK import VAT at 20 percent on almost every consignment, but goods that are made in Canada and meet Canada-UK Trade Continuity Agreement rules of origin qualify for 0 percent preferential duty at any value. The separate 135 pound duty relief ends by October 2028.
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The United Kingdom remains a top market for Canadian companies. While trade is strengthened by the Canada-UK Trade Continuity Agreement (TCA), there is a common misconception that "free trade" means "no fees."
In reality, while the agreement may eliminate duty on qualifying Canadian-made goods, it does not eliminate Value Added Tax (VAT) or other import fees. All commercial consignments to the UK are subject to scrutiny by His Majesty's Revenue and Customs (HMRC).
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Contact our team for a consultationGenerally, a consignment is assessed for both duty and VAT. Two factors decide whether duty is actually payable:
The UK is removal of th duty free threshold is expected on or before October 2028. Import VAT is unaffected and continues to apply to consignments of all values.
Because VAT and duty are two different charges, and only one of them is tied to the £135 pound figure.
This is called a disbursement fee. When your package arrives, carriers (like FedEx, UPS or DHL) pay the duty and VAT to UK customs immediately to release your goods. They then invoice you (or the receiver) for that amount plus an administrative fee for fronting the money. This fee is commonly 2.5 percent of the total duties and taxes paid, with a minimum charge (usually between 12 to 17 pounds).
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UK customs calculates fees on the assessment value (cost of goods plus shipping), the HS code (classification) and the country of origin. The duty rate below is illustrative.
A 2,000 pound shipment of goods made in China (shipped from Canada). No free-trade preference applies.
A £2,000 shipment of goods made in Canada. Qualifies for duty-free entry.
Total saving: £219.40
Send us the shipment details to request a quote to the UK:
Note that declared value is an important data point that is often overlooked. Read more about declaring a value for shipments to the UK.
Information gain: removing the 135 pound duty relief changes very little for genuinely Canadian-made goods. Under the Canada-UK TCA, qualifying Canadian-origin goods already clear at 0 percent preferential duty at any value, so the 2028 change adds no duty to a compliant Canadian-origin consignment. The real exposure sits with non-originating low value goods, for example third-country stock consolidated in Canada, that cannot claim TCA preference.
To get the saving shown in Scenario B, your goods must meet the rules of origin. Simply shipping from Canada is not enough; the goods must be manufactured or substantially transformed in Canada.
You must include a statement of origin on your commercial invoice. Download a sample declaration form here.
All consignments to the UK - even if shipping from Canada - are subject to import duty and VAT. Goods that are made in Canada and meet the Canada-UK Trade Continuity Agreement rules of origin can enter at 0 percent preferential duty. VAT still applies.
Is the £135 duty free threshold going away?The UK announced its removal by October 2028 at the latest. Import VAT is unchanged.
Does the £135 threshold removal change affect VAT?No. Import VAT still applies to consignments of all values.
Why does the carrier add a fee?Carriers charge a fee to cover the cost of advancing duty and VAT charges to HMRC. The invoice a disbursement fee, commonly is 2.5 percent of the duty and tax advanced with a minimum charge of around £15.
Will Canadian-made goods pay the new low value duty?No. Goods that qualify as Canadian origin via the Trade Continuity Agreement remain duty free. But they must be accompanied by a certification of origin.
Read more about customs duty calculation or understanding VAT vs duty.
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Disclaimer: this post and all Jet Worldwide online content is for general information only. Always confirm compliance with the importer prior to shipping.